United States District Court, N.D. Alabama, Southern Division
WILLIAM M. ACKER, Jr., District Judge.
Before the court is a motion to remand (Doc. 12) filed by plaintiffs Stewart "Buddy" Fuzzell, Jr., and Cahaba Disaster Recovery, LLC ("Cahaba"), on December 12, 2014. For the reasons stated below, the motion will be granted.
Plaintiffs initiated this action in the Circuit Court of Jefferson County, Alabama, on October 7, 2014. (Doc. 1-1 at 3). The complaint names DRC Emergency Services, LLC ("DRC"), BNY Mellon-Alcentra Mezzanine III, L.P. ("Alcentra"), Scott B. Gold, and five fictitious parties as defendants. The plaintiffs present six causes of action or theories of liability, primarily focusing on the breach of an alleged oral promise made by Alcentra and Gold to convey to Fuzzell an equity interest in DRC. (Doc. 1-1 at 20).
On November 13, 2014, Alcentra and Gold timely filed a notice of removal with this court, alleging diversity jurisdiction under 28 U.S.C. § 1332. (Doc. 1). DRC did not join in the notice of removal but consented to removal. (Doc. 1-6). Plaintiffs moved to remand the action on December 3, 2014. (Doc. 12). Plaintiffs do not challenge the timeliness of removal or defendants' satisfaction of the amount-in-controversy requirement. Instead, they only claim a lack of complete diversity among the parties.
"[A]ny civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a) (2012). "Federal courts are courts of limited jurisdiction, and there is a presumption against the exercise of federal jurisdiction, such that all uncertainties as to removal jurisdiction are to be resolved in favor of remand." Russell Corp. v. American Home Assur. Co., 264 F.3d 1040, 1050 (11th Cir. 2001).
To establish the propriety of removal via diversity jurisdiction under 28 U.S.C. § 1332, every plaintiff must be diverse from every defendant - no plaintiff's citizenship may overlap with any defendant's citizenship. Triggs v. John Crump Toyota, Inc., 154 F.3d 1284, 1287 (11th Cir. 1998). An individual is considered a citizen of the state of his domicile - that is, the last state in which he lived with an intention to remain there indefinitely. Mas v. Perry, 489 F.2d 1396, 1399 (5th Cir. 1974). "[A] corporation shall be deemed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business...." 28 U.S.C. § 1332(c)(1). All other entities are deemed citizens wherever a member of that entity is a citizen. Carden v. Arkoma Assoc., 494 U.S. 185, 195 (1990). If a member of such an entity is itself a non-corporate entity, the court must continue to drill down through the member entities until only individuals and corporations remain. See Meyerson v. Harrah's E. Chicago Casino, 299 F.3d 616, 617 (7th Cir. 2002).
Plaintiff Fuzzell is an Alabama citizen. (Doc. 1-1 at 21, ¶ 1). Fuzzell is also the sole member of plaintiff Cahaba Disaster Recovery, LLC. (Doc 1-2 at 3, ¶ 5). Because LLC citizenship is determined by the citizenship of each of its members, Rolling Greens MHP, L.P., v. Comcast SCH Holdings L.L.C., 374 F.3d 1020, 1022 (11th Cir. 2004), Cahaba is also considered an Alabama citizen.
Defendant Gold is a citizen of New York. (Doc. 1-5). Defendant DRC is an LLC. Its sole member is Seven Continents Holdings, LLLP. (Doc. 1-3). A limited partnership is deemed a citizen wherever any one of its partners, general or limited, is a citizen. Carden, 494 U.S. at 195. Seven Continents Holdings, LLLP, has three partners: 7CGP, LLC ("7CGP"); Alcentra BDC Equity Holdings, LLC ("Alcentra BDC"); and United Insurance Company of America ("United"). (Doc. 1-4 at 2-3, ¶ 8). 7CGP is wholly owned by Alcentra BDC. Alcentra BDC is wholly owned by Alcentra Capital Corporation, which is incorporated in Maryland and principally does business in New York. (Doc. 1-4 at 3, ¶ 9). United is incorporated in Illinois and principally does business in Illinois. (Doc. 1-4 at 3, ¶ 10). Therefore, defendant DRC is a citizen of Illinois, Maryland, and New York.
Plaintiffs do not contest any of the above-alleged citizenship. None of the parties mention the status of the fictitious parties, since they are to be ignored for purposes of diversity. 28 U.S.C. § 1441(b)(1). Plaintiffs only challenge the citizenship of defendant Alcentra. In its notice of removal, Alcentra alleges that it is a limited partnership with 167 partners. (Docs. 1 at 4, ¶ 8; 1-4). Alcentra offers evidence of its citizenship by a declaration from its managing partner, who states that none of the partners are Alabama citizens. (Doc. 1-4 at 2). Alcentra also lists all the partners, but the list only states the type and location of each entity. (Doc. 1-4 at 5-9). No further allegations or evidence of citizenship is included with the notice of removal.
Plaintiffs argue that these allegations are insufficient to demonstrate Alcentra's diversity. While not conceding the insufficiency of the notice of removal, Alcentra has presented voluminous new evidence regarding its members' citizenship in its response to the motion to remand. Plaintiffs contend that this new evidence is impermissible but even if considered still insufficient to establish diversity jurisdiction. Thus, the court is presented with three questions: (1) Is the original notice of removal sufficient to establish this court's jurisdiction? (2) Is Alcentra permitted to supplement or amend the notice of removal with new evidence? (3) Is the new evidence sufficient to establish jurisdiction? Each will be discussed in turn.
A. Sufficiency of the Original Notice of Removal
In the notice of removal, Alcentra essentially offers two types of evidence to demonstrate its citizenship: (1) a listing of the entity type and location of each partner and (2) statements by Alcentra's managing partner that none of Alcentra's partners are ...